Catching-Up in Green Industries: The Role of Product Architecture

As latecomers to the industrialization process, developing countries may face barriers to upgrading from the production of mass-produced goods to higher-value technologies. Scholars have suggested that ‘windows of opportunity’ can temporarily lower entry barriers and provide an opportunity for latecomers to catch up to or even leapfrog incumbents. In this paper, we use the literature on product architecture to build on the concept of windows of opportunity. Specifically, we explore how changes in a technology’s use environment can create opportunities for indigenous innovation and upgrading in specific sub-systems or components of complex technologies. Using a comparative qualitative case study focusing on three renewable energy technologies, we develop a typology of catching-up opportunities in green energy industries. Our findings suggest that policymakers should target certain technologies in their industrial strategies based on certain technology characteristics, and should seek opportunities to capitalize on a local niche that creates a need for innovation.